Trisura Group Ltd.

Good morning. Welcome to Tresura Group Limited's first quarter 2024 earnings conference call. On the call today are David Clare, Chief Executive Officer, and David Scotland, Chief Financial Officer. David Clare will begin by providing a business and strategic update, followed by David Scotland, who will discuss financial results for the period. Following formal comments, lines will be open for analyst questions. I'd like to remind participants that in today's comments, including in responding to questions and in discussing new initiatives related to financial and operating performance, forward-looking statements may be made, including forward-looking statements within the meaning of applicable Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts, please see TRISHERA's filings with the securities regulators. To ask a question during the Q&A session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. Thank you. I'll now turn the call over to David Clare.

Thank you, Operator. Good morning, everyone, and welcome. Toshiro began 2024 on strong footing. Insurance revenue grew 17% in the first quarter, and we reported a 20% operating return on equity at the same time as reaching record equity capital of $662 million. Our momentum has continued as we scale an increasingly diversified North American specialty insurance platform. In Canada, each line of business contributed to growth over the prior year. Fronting and surety led the way, growing 31% and 27% respectively. Fronting grew as a result of a more mature platform and new program additions, while surety growth was driven by increased market share, expansion in the U.S., and increased construction values. Corporate insurance grew 14% due to new business growth, stable policy retention, and continued support from our distribution partners, despite balancing market conditions in certain segments. Finally, risk solutions warranty grew 10% as a result of new programs and normalizing auto sales. This strong growth in Canada was complemented by consistently profitable underwriting, with a combined ratio of 82% in the period, in line with the prior year. The combination of growing and profitable underwriting with enhanced investment income, which grew 74%, supported a 23% increase in operating net income and a 28% operating return on equity. In U.S. fronting, insurance revenue grew 14% to $522 million as programs mature, despite non-renewing a few programs, which either did not achieve scale or are no longer within our risk appetite. Our admitted capabilities continue to grow as we added $92 million in admitted insurance revenue in the quarter. The market continues to drive opportunities to excess and surplus lines, and we are well-positioned to capture business in both segments. U.S. fronting generated $22 million in fees, a 23% increase, and recorded $40 million of deferred fee income indicative of future fees to be earned. Operating results in the quarter were strong and demonstrate progress made on improved profitability in our U.S. platforms. When excluding non-recurring items, our loss ratio and fronting operational ratio improved to 67% and just under 85% respectively. Our fronting operational ratio has started to move down as operations normalize in U.S. fronting, despite continued investments in infrastructure. We reiterate our target of a low 80s to high 70s fronting operational ratio in the medium term. Continued growth and improved loss ratio and an increase in investment income, which grew 53% in the period, contributed to a 30% increase in operating net income and supported a 14% operating ROE. On an annualized basis, U.S. fronting operating ROE was 19% in the quarter. We observed healthy, albeit stabilizing pricing trends across most lines and continue to expect hardening trends in certain lines to balance, although not reversed this year. This will be informed by the state of the reinsurance market as well as economic and interest rate trends, and we feel well-equipped to navigate this environment. Across the group, net investment income grew 66% as a result of a larger portfolio and higher yields. We've experienced striking changes in the contribution to earnings from our investment portfolio and maintain a more defensive and higher quality portfolio than almost any time in our history. Our growth and profitability has been significant in the context of a higher rate environment, meaning we benefit from a larger portfolio invested at higher rates, working now to secure those rates for years to come. We are excited to have closed our U.S. Treasury-listed surety acquisition in the quarter. This acquisition further confirms Tresher's commitment to the U.S. surety market and is an important step in achieving our long-term growth plans of becoming a significant participant in the North American surety space. We anticipate expanding licenses through the latter half of this year and expect the acquisition will be impactful to growth in the long term. We are happy to report our first U.S. corporate insurance policy was written in April, an exciting initial step for the expansion into the U.S. In April, we also announced the appointment of Lillia Sham to our Board of Directors and the candidacy of Sasha Haack for election at this year's Annual General Meeting. Ms. Sham and Ms. Haack have enjoyed long and successful careers in the financial services industry, and we are excited to benefit from their contributions going forward. On June 3rd, we will host our AGM and Investor Day. As part of the Investor Day, we will be highlighting the management teams of our Canadian and U.S. entities in a fireside chat format, providing the opportunity for investors to meet a broader group of Tricia members. This event will be in person as well as streamed online. We remain committed to specialized underwriting as well as conservative reserving. It is our hope that volatility will continue to provide opportunities to win business and strengthen our reputations. We are planning for growth, and with a strong capital base and greater scale, we feel optimistic for the years ahead. With that, I'd like to turn the call over to David Scotland for a more detailed review of financial results.

Thanks. Thanks, David. I'll now provide a walkthrough of financial results for the quarter. Insurance revenue was $744 million in the quarter, reflecting growth of 17% over the prior year. Insurance service expense, which consists of amortization of insurance acquisition cash flows, such as commissions, claims, and other operating costs, increased in the quarter primarily as a result of growth in the business, leading to an increase in volume of claims and commissions. Net expense from reinsurance contracts, which includes both premium paid to reinsurers as well as recoveries from reinsurers, increased in the quarter as a result of growth in the business, which has led to more reinsurance seated, particularly from front-end. Insurance service result in Canada for the quarter was greater than the prior year as a result of growth in the business and continued strong underwriting profitability. Insurance service result in the US for the quarter was greater than the prior year, primarily as a result of the impact of the 2023 runoff costs. Excluding the 2023 runoff costs, insurance service result in the US was still greater compared to the prior year as a result of growth in the business and improved profitability in 2024. The combined ratio in Canada for the quarter was 82%, which is approximately the same as the prior year, driven by a low loss ratio of 16% in the quarter. The fronting operational ratio in the U.S. for the quarter without the impact of the runoff was 85%, which is lower than the prior year, primarily as a result of a lower loss ratio mitigated by increased investments in internal infrastructure. Net investment income increased by 66% in the quarter as a result of an increase in the size of the investment portfolio, but also benefiting from higher risk-adjusted yields. Net gains from investments was $12 million in the quarter, primarily as a result of unrealized gains on equity investments held at fair value through profit and loss under IFRS 9, as well as foreign exchange gains as a result of strengthening of the U.S. dollar in the quarter. The investment portfolio also saw unrealized gains in the quarter recorded through other comprehensive primarily related to increasing the value of preferred shares. Other operating expense, excluding the impact of share-based compensation, which is medicated through a hedging program, increased 37% for the quarter, reflecting growth in the business. Net income for the group was $36 million in the quarter. Operating net income, which adjusts for certain items to reflect income from core operations and excludes the impact of non-recurring items, including the runoff business, was $33 million in the quarter, which is greater than the prior year as a result of growth in the business, continued strong underwriting performance in Canada, improved profitability in U.S. renting, and growth in net investment income. Diluted EPS was $0.75 a share in Q1, which was higher than the prior year, primarily as a result of the runoff costs. Operating EPS, which reflects core operations and excludes the impact of non-recurring items and unrealized gains, was $0.68 a share in the quarter, reflecting growth at 12% over the prior year. Consolidated ROE on a rolling 12-month basis was 15% at Q1 2024, which improved over the prior year due to improved profitability in the U.S. Operating ROE was 20%, which is approximately the same as the prior year. Equity at March 31, 2024 was $662 million and is greater than the prior year as a result of positive net income in the period, as well as unrealized gains on the investment portfolio and an increase in the U.S. dollar in the period. The book value per share was $13.89 at March 31, 2024, and is greater than December 31, 2023, as a result of profit generated from insurance and investment income in the period, unrealized gains on the investment portfolio, and foreign exchange gains. As of March 31, the debt-to-capital ratio was 10.2%, which was lower than December 31, 2023, as a result of an increase in equity during the period. The company remains well capitalized and we expect to have sufficient capital to meet our regulatory requirements. David, I'll now turn things back over to you.